What should be a focus when developing a budget for a practice?

Focusing on incorporating flexible financial goals when developing a budget for a practice is essential for a few key reasons. Flexible financial goals allow for adjustments based on changes in the practice’s needs, economic conditions, and unexpected expenses or opportunities. This adaptability is crucial in healthcare management, where patient volume, regulatory changes, and operational costs can fluctuate significantly.

By having flexible goals, practice managers can create a budget that not only reflects the current situation but also accommodates future changes, leading to more sustainable financial health. This approach encourages a proactive stance, allowing the practice to adapt and thrive rather than risk instability due to rigid financial planning.

In contrast, assuming all expenses will remain the same can lead to unpreparedness for unexpected costs. Eliminating all discretionary spending might stifle growth and diminish the quality of patient care, while creating high revenue targets without data sets an unrealistic expectation that may lead to financial mismanagement. Therefore, incorporating flexible financial goals is a more balanced and strategic approach to budgeting in a practice.